CalHFA’s Dream For All program truly seemed like a dream, as it allowed first-time buyers to buy homes with 0% down and very favorable financing terms.
It was such a “dream” in fact that we pre-approved over 100 borrowers for the program since its inception only ten days ago.
We touted the program heavily and moved full speed because we were assured that the program had ample funding – and we were delighted to be able to help so many first-time buyers who lack the necessary funds for a down payment.
But, we were informed by CalHFA yesterday that the Dream For All program will be paused on Wednesday, April 12th, and likely will be out of funds by Monday, April 10th.
Needless to say, this is very frustrating for us, and no doubt devastating for the many buyers who were so excited about using “Dream” financing to buy their first homes.
What Now?
“Dream” buyers making offers today or over the weekend need to keep loan contingencies in place.
And, our entire pre-approval team will be working frantically to re-qualify Dream buyers for alternative financing options.
These options include 3.5% down FHA and 3% down conventional loans, as well as other down payment assistance loans (but these tend to be more restrictive than the Dream Program, unfortunately).
This is a reminder too that buyers can still use “gifts” from relatives for down payments in most cases, and that we can provide credits to cover a large portion or all of closing costs in some cases (particularly with FHA loans).
Will the Dream Program Get Funded Again?
On the one hand, California is broke and facing a huge deficit, so funding a homebuying program may not be the most prudent thing to do with limited funds.
But, on the other hand, helping first-time homebuyers looks great politically and supporting the Dream program will probably help some politicians earn some badly needed votes.
So, we are hoping for the “other hand,” and we will keep you posted – as CalHFA has provided no information yet regarding the possibility of obtaining more funds for the Dream Program.
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